The Diagram Below Shows the Demand Curve and Marginal Cost

question 95

Multiple Choice

The diagram below shows the demand curve and marginal cost and marginal revenue curves for a new heart medication for which the pharmaceutical firm holds a 20-year patent on its production and sales.This protection gives the firm monopoly power for the 20 years of the patent. FIGURE 10-6
-Refer to Figure 10-6.Assume this pharmaceutical firm has no fixed costs and is practicing perfect price discrimination among its buyers.At its profit-maximizing level of output,it will generate a total profit represented by

• A)areas B + C + F + G + H + I.
• B)areas C + F + H.
• C)areas G + I.
• D)the area below the demand curve minus the area below the MC curve,up to Q₁.
• E)It is not possible to determine with the information provided.

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